For those doing the buybacks but still have an outstanding loan...

[da_jokker]

All,

I'm kicking myself for not doing this sooner but I did not expect VW to drag a$$ so much once the gavel fell.


For those that have not heard of Lightstream before, you may want to check it out. You can read about them but basically they give you an unsecured loan designed for a specific purpose.

What this allows you to do is basically still have a loan on your VW, (probably with lower payments), but a free-and-clear title.

So for example, I still owe $6,500 on my Jetta. So I got a loan through them, paid off the VW loan with it. I'll get my clean title and yes I'll have to start over with the VW claim docs, but at least then my trade in will be clean and clear and I'll have a check handed to me in full.

Of course as soon as you cash the VW check (assuming it won't bounce ), you turn around and pay off the LightStream loan.

meanwhile not only does it drop my Loan payment $100 per month, but now I can lower my insurance on the car to almost nothing $20 per month because the car is just sitting in the garage and won't move until the buy back.

 

[PacCoastFwy923]

Wait, what?

You'd replaced a low interest secured loan with a high interest unsecured loan?

I'm not understanding the intent here.

 

[uscnoklahoma]

Depends on payoff differences and how much his insurance went down. It could be a good thing in his situation.

 

[PacCoastFwy923]

Loan status has no bearing on insurance.

Nobody with a loan balance is losing any VW money, other than monthly interest, in the neighborhood of $30 a month for a $16,000 loan at 2.5%.

Switching to a higher interest loan causes that "lost" amount to increase. Plus, with a unsecured loan, ones credit rating is negatively impacted, and there **may*! be early payment penalties (I didn't read the specifics of this offer).

Don't shun a legitimate financial institution for a payday lender!

 

[IAmTodd]

I just stuck with my .9% loan from VW finance. Once I had my turn in date I called up the nice lady there and ask for my payment to be differed for two months and tada, no more car payment.

 

[PacCoastFwy923]

At .9%, you're not accruing much additional interest, and this is definitely preferable to what the OP suggested. But if anybody reading this isn't aware, any payment made on your car loan while waiting for buyback comes right back to you from VW, minus interest.

So by deferring payments, VW pays the bank more, pays you less, and you pay the bank a little more interest.

 

[csl223]

Loan status has no bearing on insurance.

Nobody with a loan balance is losing any VW money, other than monthly interest, in the neighborhood of $30 a month for a $16,000 loan at 2.5%.

Switching to a higher interest loan causes that "lost" amount to increase. Plus, with a unsecured loan, ones credit rating is negatively impacted, and there **may*! be early payment penalties (I didn't read the specifics of this offer).

Don't shun a legitimate financial institution for a payday lender!

I am pretty sure loan contracts often state minimum insurance policies, therefore it does have an effect on the insurance one has to keep.

Also lightstream is a reputable company from what I can see, and they have pretty good rates... they aren't payday lender!

I wouldn't really go through the hassle of doing this, and having another loan and credit inquiry on my credit report, especially since my VW credit loan is 0%.

 

[DanB36]

Loan status has no bearing on insurance.

Sure it does. If you have a traditional, secured auto loan, you're required to maintain comp/collision insurance on the car. If you don't have a secured loan, that (expensive) coverage is optional. It still seems like a good idea to me, with the premium we're getting over market value, but it isn't required.

This still seems like a good bit of work to resolve a non-issue, though.

 

[PacCoastFwy923]

What I'm saying is the lender most likely isn't going to come after an owner (or put you on an expensive "house policy") if the vehicle is dropped down to minimal coverage. In other words, the insurer doesn't care about the title status.

For instance, my loans always stipulate a $500 deductible, and I carry a $1,000 deductible. They never bother me about this, they just want to have genetic certificate stating the vehicle is covered.

I'd just drop down to whatever is reasonable coverage for the car's current usage / parking location. The important thing is covering the car reasonably. If the lender has a problem with this, they'll make contact and issue a correction deadline, and by then the car will probably be back in VW's hands.

 

[logskidder]

I owe $748 on an outside loan not with vw credit. Next payment is due Jan. 17th. My buyback date is set for Jan.26
I will be so close on the buyback date should I proceed with payment? If so will they reimburse the $477 payment I will make on the 17th?

 

[PacCoastFwy923]

Yes you'll be reimbursed.

 

[da_jokker]

Wait, what?

You'd replaced a low interest secured loan with a high interest unsecured loan?

I'm not understanding the intent here.

Interest rate really has no bearing when we are talking about such a short term. I guess if you own thousands on your ride maybe, but for the 2-3 months it will take to pay it off..not worried.

 

[da_jokker]

Loan status has no bearing on insurance.

Nobody with a loan balance is losing any VW money, other than monthly interest, in the neighborhood of $30 a month for a $16,000 loan at 2.5%.

Switching to a higher interest loan causes that "lost" amount to increase. Plus, with a unsecured loan, ones credit rating is negatively impacted, and there **may*! be early payment penalties (I didn't read the specifics of this offer).

Don't shun a legitimate financial institution for a payday lender!

Incorrect or I wasn't clear. You must have full coverage when you have a lean holder (at least in my state) so by doing what I did, my interest rate went up 1%, my monthly payment went down $100 a month, and now my monthly insurance has been halved because I dropped the full coverage.

Not to mention the non-measurable benefit of having a straight keys for full check swap when I get my turn.

 

[da_jokker]

As for the other replies....my post was to make people aware you could "pay off" your vw now and lower you virtual monthly payment until the buyback occurs....IF the numbers crunch. For some it will, for some it may not.

As for the hassel...there wasn't any. Applied for the loan online, had the funds in my bank account the next day. Paid off the VW and dropped my insurance all online that same day.

Now I'll get a check from VW for 13k instead 5.5k. Meanwhill I'm making 2 car payments and now I have room to breathe.